Summary: Insurer
filed petition seeking determination that claimant's current medical and
psychological conditions are not related to a work injury and that the
insurer's liability for that work injury has ended. It also sought judgment
that claimant reimburse it for medical and psychological benefits paid
under a reservation of rights. Citing Champion International Corp. v.
Brennan, WCC No. 9504-7269 (1995), claimant moved to dismiss the petition
as an improper preemptive strike by the insurer and for failure to mediate
the third issue.

Held: Claimant's
motion to dismiss is granted. As established in State ex rel. Industrial
Ind. Co. v. District Court, 169 Mont. 10, 14, 544 P.2d 438 (1975), "ordinarily
a court will refuse a declaratory judgment action which can be made only
after a judicial investigation of disputed facts, especially where the
disputed questions of fact will be the subject of judicial investigation
in a regular action." Here, as in Champion, the insurer is no longer
paying benefits, the claimant has not petitioned the Court, and he may
never do so. In those circumstances, where the matter involves a factual
dispute, the Court will not force a claimant to settle or litigate at
the direction of the insurer. The third claim is dismissed for failure
to mediate the particular issue of reimbursement.

Topics:

Declaratory Judgment:
Pre-emptive Strikes. Insurer's petition for declaratory judgment
on claimant's entitlement to continued benefits for conditions insurer
alleged were not related to work injury was dismissed as improper preemptive
strike. As established in State ex rel. Industrial Ind. Co. v. District
Court, 169 Mont. 10, 14, 544 P.2d 438 (1975), "ordinarily a court
will refuse a declaratory judgment action which can be made only after
a judicial investigation of disputed facts, especially where the disputed
questions of fact will be the subject of judicial investigation in a
regular action." Here, as in Champion International Corp. v. Brennan,
WCC No. 9504-7269 (1995), the insurer is no longer paying benefits,
the claimant has not petitioned the Court and may never do so, and the
underlying dispute involves factual matters.

Mediation.
Claim for reimbursement contained within insurer's petition for declaratory
judgment dismissed for failure to mediate that particular issue.

The petition in this matter
was filed by the insurer, Lumbermens Mutual Casualty Company (Lumbermens).
According to the petition, the respondent/claimant (claimant) was injured
in a motor vehicle accident on November 5, 1991, while working for Buttrey
Food and Drug Company, which Lumbermens insured. (Petition for Trial,
¶ A.) The accident occurred in Billings. (Id. ¶ B.) Lumbermens
accepted liability for the accident, but it now seeks to limit seeks to
limit its liability. Specifically, it seeks the following relief:

(1) A judgment determining
that claimant's "current medical and psychological conditions are not
related to his injury on November 5, 1991."

(2) A declaratory judgment
determining that its "liability for any benefits as a result of the
November 5, 1991 injury has ended."

(3) A judgment ordering
claimant to reimburse it for medical and psychological benefits it has
paid under a reservation of rights.

(Id. at 2.)

Claimant has responded to
the petition with various motions. Initially, he moves to dismiss the
petition. (Respondent's Motion to Dismiss, to Change Venue, and for Attorneys
Fees; Or, in the Alternative, to Join Additional Parties.) In the event
his motion to dismiss is denied, he moves for a change of venue and to
join additional parties. (Id.) He supplements the foregoing motions
with a motion for a protective order staying discovery until his substantive
motions are decided and, in the event the Court denies his motion to dismiss,
then for a new scheduling order. (Respondent's Motion to Vacate Scheduling
Order and Motion for Protective Order.)

Discussion and Resolution

Since the Court finds the
motion to dismiss meritorious, it will limit its discussion to that motion.

I.

Citing Champion International
Corp. v. Brennan, WCC No. 9504-7269 (June 13, 1995), claimant moves
to dismiss Lumbermens' first two claims on the ground that they are preemptive
strikes. In Brennan this Court dismissed an insurer's petition
seeking a determination that the claimant was not entitled to
further benefits. The insurer was not paying benefits at the time of the
petition; thus, it was not seeking to terminate ongoing benefits, rather
it sought to limit its future liability. This Court dismissed the petition,
holding:

The cause of action in this
case belongs to the claimant, not to the insurer. It is he who, under
the Workers' Compensation Act, may be entitled to benefits for work-related
injuries. Thus, the insurer's petition is one for declaratory judgment.
"The purpose of declaratory relief is to liquidate uncertainties and
controversies which might result in future litigation
and to adjudicate rights of parties who have not otherwise been given
an opportunity to have those rights determined." In re Dewar,
169 Mont. 437, 444, 548 P.2d 155 (1976) (emphasis added). Courts are
not required to entertain every action for declaratory judgment. Even
though all of the necessary elements of jurisdiction exist, the Court
may, in its sound discretion, dismiss the action. Brisendine v.
Montana Department of Commerce, 253 Mont. 361, 364, 833 P.2d 1019
(1992).

A declaratory judgment was
never intended "to provide a substitute for other regular actions." In
re Dewar, 169 Mont. at 444. Its primary purpose is "to determine
the meaning of a law or a contract and to adjudicate the rights of the
parties therein, but not to determine controversial issues of fact . .
. ." Raynes v. City of Great Falls, 215 Mont. 114, 121, 696 P.2d
423 (1985); accord Remington v. Department of Corrections, 255
Mont. 480, 483, 844 P.2d 50 (1992). The Montana Supreme Court has adopted
the general rule from C.J.S. on declaratory judgments in State ex
rel. Industrial Ind. Co. v. District Court, 169 Mont. 10, 14, 544
P.2d 438 (1975). It said "'ordinarily a court will refuse a declaratory
judgment which can be made only after a judicial investigation of disputed
facts, especially where the disputed questions of fact will be the subject
of judicial investigation in a regular action.'" (Quoting 26 C.J.S. Declaratory
Judgments, section 16, page 81.)

Champion's response to the
order to show cause confirms that its petition raises significant factual
issues. It says, "The parties have significant differences of opinion
on material facts and legal interpretations dealing with entitlement."
(Consolidated Reply to Court's Orders to Show Cause at 4.) Factual issues
are more appropriately raised in an action commenced by a claimant for
benefits, not in a declaratory judgment action.

It is also uncertain whether
claimant ever will pursue any action for further benefits. It is by no
means certain that an adjudication concerning any of his claims will ever
be required. Courts should not "determine matters purely speculative,
enter anticipatory judgements, . . . adjudicate academic matters, . .
. [or] provide for contingencies which may hereafter arise . . . . " Department
of Natural Resources & Conservation v. Intake Water Co., 171
Mont. 416, 440 (1976).

Champion cites a number of
cases in support of its contention that it is entitled to pursue its present
petition. All but one of the cited cases are distinguishable because they
concern concrete claims for indemnification as between insurers, EBI/Orion
Group v. State Compensation Mutual Insurance Fund, 249 Mont. 449,
816 P.2d 1070 (1991); for repayment where the insurer has overpaid, Champion
International Corp. v. McChesney, 239 Mont. 287, 779 P.2d 527 (1989)
and Aetna Life & Casualty Co. v. Main, WCC No. 9112-6315
(decided July 21, 1992); for amounts allegedly due the insurer as a result
of settlement of a third party action, State Compensation Mutual Insurance
Fund v. Mordja, WCC No. 9202-6391 (decided September 16, 1992); or
for repayment of amounts paid due to a claimant's fraud, State Compensation
Mutual Insurance Fund v. Chapman and Pyfer, WCC No. 9207-6543 (decided
September 1, 1993). The last cited case, Connecticut Indemnity Co.
v. Nerpel, WCC No. 9206-6464 (decided June 30, 1993), did not address
the appropriateness of an action brought by the insurer. It established
no precedent with regard to the present question.

I conclude that the petition
in this matter is an inappropriate action for a declaratory judgment and
should be dismissed. The insurer cannot force a claimant to settle or
litigate just so it can close its files. (Id. at 2-3.)

Lumbermens' first two requests
for relief are indistinguishable from the request made in Brennan.
At this point of time, claimant has not petitioned the Court for further
benefits. He may never do so. Lumbermens cannot force him to do so. Lumbermens'
first two causes of action must therefore be dismissed.

II.

As to Lumbermens' third request
for relief, claimant alleges that the request was not mediated. In his
reply brief, he provides copies of the requests for mediation. Neither
of the two requests concern repayment of medical benefits paid by Lumbermens
under a reservation of rights.

Mediation is a prerequisite
to invoking this Court's jurisdiction to adjudicate disputes involving
workers' compensation benefits. Mediation is mandatory and must be completed
before a party may petition the Court for relief. Section 39-71-2401(1),
MCA (1991), provides in relevant part:

(1) A dispute concerning
benefits arising under this chapter or chapter 72, other than the disputes
described in subsection (2), must be brought before a department mediator
as provided in this part. If a dispute still exists after the parties
satisfy the mediation requirements in this part, either party may petition
the workers' compensation court for a resolution.

Section 39-71-2408(1), MCA
(1991), provides in relevant part:

(1) Except as otherwise
provided, in a dispute arising under chapter 71 or 72 of this title,
the insurer and claimant shall mediate any issue concerning benefits
and the mediator shall issue a report following the mediation process
recommending a solution to the dispute before either party may file
a petition in the workers' compensation court.

39-71-2905, MCA (1991), provides
in relevant part:

A claimant or an insurer
who has a dispute concerning any benefits under chapter 71 of this title
may petition the workers' compensation judge for a determination of
the dispute after satisfying dispute resolution requirements otherwise
provided in this chapter.

In previous cases, this Court
has held that the mediation must address the specific issue raised in
the petition. "Parties cannot mediate one issue, then petition the Court
with respect to other, non-mediated issues." Debbie Gallup v. State
Compensation Ins. Fund, WCC No. 9604-7537, Order Dismissing Petition
(5/21/96) at 2-3.

In this case, the parties
have mediated only two issues. As set forth in the mediation notices attached
to Insurer's Response to Respondent's Motion to Dismiss, to Change Venue,
and for Attorneys Fees; Or, in the Alternative, to Join Additional Parties
and Respondent's Motion to Vacate Scheduling Order and Motion for Protective
Order, the issues mediated were:

[W]hether or not Mr. Mares
[claimant] is entitled to further psychological treatment for the effects
of his industrial injury.

(Id., Exs. A and B.)
While the factual dispute underlying Lumbermens' claim for reimbursement
might be the same dispute underlying the mediated issues, the
factual underpinnings for the dispute may also be unrelated to the two
mediated issues. What transpired in the mediation is confidential. § 39-71-2410,
MCA. Therefore, the Court cannot inquire into the actual mediation proceedings
to determine if the unmediated issue overlaps the mediated issues. The
reimbursement issue must be separately mediated and is therefore premature.

ORDER

For the reasons set forth
in the forgoing discussion, the petition is dismissed.